Huge Windows XP sales save the world

XP fibs off the shelves...

We've told you this before, but it's pertinent. A few years back The Reg ran into our old friend Mich Mathews in the Microsoft press office at Comdex. She was, she happily told us, busy writing the keynote Bill had made the previous evening. And here we go again - Mich is surely too grand these days to be doing this stuff, but Bill seems to have said some markedly different things about WinXP sales, depending...

In the release that came out at the time of the keynote, Bill said this:

"In just the two weeks since the global launch of Windows XP, Microsoft has already sold an amazing 7 million copies of Windows XP, which we are incredibly excited about," Gates said, referring to the total number of copies sold to computer makers and at retail. "We believe that Windows XP, along with exciting new technologies such as the Tablet PC, Xbox, Microsoft .NET Servers and XML Web services, will light a fire of innovation across the entire high-technology industry."

Watch that 7 million carefully, and now watch it disappear. In the transcript of the keynote that was published yesterday, Bill said this instead:

"With all the uncertainty, we weren’t sure what the sales would be like, what the OEM sales would be like, what the retail sales would be like. Now, two weeks later, we have that data. Our OEM sales are far beyond any new product we’ve ever had. Our retail sales are more than double any version of Windows or, of course, any software product that’s ever been released."

There is nothing in the transcript even approaching the first quote, and it's the only part of it that refers to WinXP sales. Conspiracy? No, the transcript reads like a transcript, so even a little massaged it should be broadly similar to what Bill actually said. The press release quote, on the other hand, reads like a press release quote, i.e. one of those things nobody actually ever says, but that the press releaser wants to plant in the public domain.

The interest lies in the number itself, and in what Bill says about retail sales. With that 7 million banked in our stats machine, we can figure out initial OEM sales just as soon as we get the first accurate retail sales data in. Conversely, OEM shipment data, provided it can be nailed down to the right period, would allow us to say precisely what initial XP retail sales were (or at least what Microsoft is currently saying they were).

The background to this will naturally have been the marketing droids being told to go and get a record-breaking fact ot two for Bill to announce. When it comes to Windows sales this obviously gets progressively more difficult to do, but they've cracked it quite well this time, and (relatively) honestly. Fib number one is that in "just two weeks... Microsoft has already sold." This is not true, because OEMs have been shipping WinXP machines for quite some considerable time now. Microsoft will have "sold" the licences for these machines in advance of their shipping, and the OEMs will have made specific volume commitments. Which gets us to fib number two - Bill, you knew damn well what OEM sales would be like two weeks ago, because you'd already closed them.

Microsoft doesn't know precisely what OEM sales are going to be like over the next couple of quarters, or the next year, but that is an entirely separate matter dependent on the economy. The honest bit, since you ask, is the insertion of "referring to the total number of copies sold to computer makers and at retail." The claim would have been massively misleading without it, but quite a few people could be expected to just run off and print the 7 million without the qualifier. Check out the ones who have on your travels.

What though, does Microsoft know about retail numbers ahead of them happening? These aren't anything like as easy to predict as OEM numbers, but the OEM numbers will always dwarf retail. Microsoft does know the advance orders the retailers made, and indeed the volumes Microsoft has told them to commit to. It can count these as "sales" if it wants to (maybe it did, maybe it didn't), so in that case the number for the first two weeks could be pretty precise, but it can't with any great precision say how fast the software is going to move off the shelves.

As it's actually the OEM sales that bring in the revenue, a major objective for Microsoft retail sales of XP would be just to make it sell faster than any previous Windows so Bill and the High Command can say so. As we've said before, this isn't hard, given that the number of machines that could have a new OS bought for them is bigger than it was last time, and given that Microsoft is pouring huge amounts of money (much of it belonging to its partners) into the initial sales push. Vendors everywhere have been induced to put together compelling giveaways (or "Mug's Eyefuls," as our friend Sir Alan Sugar used to say) designed to make XP fly off the shelves.

So although Microsoft can't predict retail numbers over the coming holiday period, it was in an eminently good position to make a pretty good guess at them for the first two weeks. Fib or not? You judge.

Do the numbers tell us whether or not XP will be a success? No, they do not. Will XP be a success? Yes, it will. Does Microsoft know XP will be a success? Yes, it does. Will Microsoft tell us how wonderfully XP's selling at regular intervals? Yes, unfortunately.

Microsoft keeps putting out this stuff because it wants people to believe Windows (insert variant here) sells because it's great. It may or may not be, but the fact of the matter is that it sells because Microsoft owns the only game in town.

Context Corner - previous sales claims:

"Microsoft said that its new Windows 98 upgrade is well on its way to matching the sales of the Windows 95 program over its first three months on the market. Whereas Windows 98 is selling to a larger installed base of users, the sales rate for what [is] a relatively modest upgrade is far exceeding the expectations of many, said Jeff Raikes, group vice president for sales and support. Since its June 25th launch, Windows 98 has currently sold more than 1 million upgrade units, said Microsoft." - Reuters, 25th July 1998.

"More than 10 million customers worldwide have purchased either a Windows 98 retail upgrade or a new Windows 98 PC since the operating system was released on June 25." - Microsoft, 20th October 1998.

"We're forecasting there will be more Windows 98 sold in the first six months than there was in the first six months of the launch of Windows 95." - Microsoft Channel Marketing president David Goldstein, 25th May 1998.

"Strong Holiday Sales Make Windows 98 Best-Selling Software of 1998... Microsoft Corp. today announced that 1998 holiday sales of Microsoft Windows 98 operating system licenses topped nearly 3 million units, making it the most popular version of Windows ever sold during the holiday season. These figures represent North American license sales of both retail upgrades and versions preinstalled on new PCs. Microsoft also announced today that worldwide licenses of Windows 98 have reached 25 million units." - Microsoft, 9th February 1999.

And finally, back to the present:
"Since its retail debut Oct. 25, Microsoft Corp.'s newest operating system, Windows XP, is achieving high demand worldwide. So high that some retailers are having trouble keeping store shelves stocked with Windows XP. Growing consumer demand for Windows XP has led to sales that are exceeding initial sales of Windows 95 and Windows Millennium Edition (Windows Me) and keeping pace with initial sales of Windows 98." - Microsoft, 8th November 2001.

Exceeding? Keeping pace with? But three days later didn't Bill say "more than double"? ®